Magazine article The American Prospect

Civilization's Price: The Simple Truth: We Need Higher, and Smarter, Taxes

Magazine article The American Prospect

Civilization's Price: The Simple Truth: We Need Higher, and Smarter, Taxes

Article excerpt

IF JOHN KERRY IS ELECTED THIS FALL, HIS NO. 1 TASK WILL be to deal with the huge budget mess George W. Bush's tax cuts have created. Which begs the question: How could President Kerry build public support for the higher taxes our country desperately needs?

So far, Kerry hasn't shown any inclination to talk seriously about taxes. Yes, he has proposed rolling back some of the Bush tax cuts for people making more than $200,000 a year. But he wants to devote all the revenue that raises to new tax cuts, mainly for the middle class. In fact, the Tax Policy Center calculates that Kerry's overall tax plan would reduce revenues by $617 billion over the next decade.

To be sure, Kerry's tax cuts are only half as big as the $1.2 trillion in additional tax cuts that Bush is proposing--and much better targeted. Yet with federal income taxes down to their lowest level as a share of the economy since before World War II, you'd hope Kerry would do a lot better than Bush Lite. He can and should.

Kerry's pollsters have undoubtedly told him that voters enthusiastically favor public services, but generally prefer not to have to pay for them. True enough (duh). But that's just a statement about human nature, not a prescription for rational public policy.

The truth is that most people are willing to pay their fair share for public services. But nobody wants to be a chump. So Kerry has to show the public that everyone else is chipping in, too. Because that's demonstrably not the case now, Kerry needs to propose some major reforms to make his case.

Much better tax enforcement. Under Republican leadership, the Internal Revenue Service has been denied both the authority and the means to crack down on tax cheating. As a result, hundreds of billions of dollars a year in taxes legally owed go uncollected, and the biggest tax evaders are wealthy individuals and corporations. Kerry should propose a major expansion in the IRS audit budget, expanded reporting requirements, tougher penalties, and so forth. That way honest taxpayers--still the vast majority of us--can have some confidence we're not being ripped off by the unscrupulous. If Republicans want to complain that many tax cheats are "small businesses," well, bring it on.

Fewer loopholes. Republicans may have a leg up on Democrats when it comes to zeal for tax loopholes, but both parties are guilty of using the tax code to promote a vast array of favored activities. …

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